August Beach Read Series: Understanding FIRREA

DOJ False Claims Act / FIRREA

FIRREA is a financial fraud statute that has been on the books for decades, and is fast-becoming a valuable weapon in the Department of Justice’s efforts to combat alleged financial fraud. FIRREA’s reach is broader than other civil fraud statutes available to the government, making it an especially powerful tool.

• It allows civil liability for violations of any of 14 enumerated criminal statutes, including mail and wire fraud;
• It allows for whistleblower recovery, and the potential for significant monetary penalties for the government;
• It has a 10 year statute of limitations; and
• Unlike the False Claims Act, there need not be a link between government funds and the alleged fraud; instead, the fraud need only affect a federally-insured financial institution, which arguably can include the defendant institution.

To learn more about FIRREA and how it impacts the financial services industry, please review some of our recent articles on the issue. BuckleySandler partner, Andrew Schilling, recommends what steps to take if your institution receives a FIRREA subpoena in his article, “U.S. Using Subpoenas Under 1989 Act as New Tool to Probe Financial Firms.” BuckleySandler attorney Andrew Schilling use a small civil bank fraud case to shed some light on how penalties in FIRREA cases are determined in “Finally, 8 Factors Governing FIRREA Civil Penalty Awards”. Matthew Previn discuss the first time the court permitted DOJ to use FIRREA against an institution engaging in fraud that “affects” the same institution in their article, “A Financial Institution’s Fraud on Itself Triggers FIRREA.” Visit our False Claims Act and FIRREA Practice Resource Center for additional information.